The 10 things you need to do for successfully taking your company global
“We’re going for world domination”, is the typical answer from any founder if you ask to their ambition, some with a cheeky grin. And for obvious reasons; we all want to build something big, and the world today is a global. So that question isn’t hard.
It’s the next one that’s hard; how exactly are you going to do that?
- Don’t go cross border before the foundation of your company can carry it. Once you’re battling a war on two side you’re not going to have time to create procedures, or build important underlying technology. Get that sorted before you move overseas, so you’ll want to be able to use all your energy on adapting to the many unexpected demands the new market will bring. Scaling before you’ve built up core operational capacities means jeopardizing the rest of your organization. In the same way you finish the foundation before you add the second floor to a house, you need to establish core operational capacities, like budgets, scalable technology core and key processes before you scale. While it may not be immediately evident, a house without adequate foundation will always start to crack sooner or later.
It’s not unusual that a previously well-functioning organisation stops working once the founder/CEO start putting all their attention elsewhere, a proof that a solid organisational foundation hadn’t in fact been created, it probably just looked like it because the founders were always at hand to fix things. So start delegating responsibility while you’re still there.
- Be sure you’ve got your product market fit is 100%. The first important question to ask, isn’t “how”, but “when”.
Most startups want to go abroad too early. For startups at the stage of product-market-fit (when you’re testing your product on the market, getting the feedback that it’s not quite there, making changes, repeat, repeat, repeat), it’s too early. This is the phase where people like your product, but not sufficiently to be willing to pay for it. If you’re at this stage, don’t go abroad. At this stage you need to focus all you efforts on finding the exact product that the market really wants. Being pre-product-market-fit is like pushing a rock up a mountain. Unsurprisingly it’s no easier pushing it up two mountains.
- No, “born-global” isn’t an automatic thing. Born-global products are products that are available everywhere immediately, typically software, available everywhere via the web or app stores. But to think that being available is sufficient is a big misunderstanding.
While it’s fabulous to test the product against an international user base, and get some initial traction in a huge pool, it still takes consistent and structured activities in sales, marketing and service to get a serious position in each country you want to win. You should expect serious efforts including localization, multi-lingual service, targeted marketing and specialized sales staff. The luxury of the born-global product is that you’re more likely to be able to do everything from your head office.The majority of companies do not have born-global products, despite having scalable potential. This requires a more traditional approach with people on the ground.
- Two sided businesses are the hardest to spread. In several of my companies we’ve had a two sided proposition, which means we need inventory on both customer and supplier side before the product works, similarly to Airbnb, Uber, Booking.com etc. While we’re internet companies, our product requires specific local inventory to work, this means we need a structured going abroad plan, and often people on the ground. A good method for these companies are market-by-market or city-by-city.
- Build international operations from day one. Years before you even consider going overseas you should start warming up for it. Start by ensuring that all documents, documentation and written communication is done in english. That means that when you get your first employee that doesn’t speak your language the person can understand historical records and processes. In general I recommend “starting with the end in mind” which means taking the 10% extra time to create structures from day one, in anticipation of the company becoming big.
- Hire international people from the beginning. A diverse culture will make it easier to transition into an international company, as the tone and rituals isn’t rooted in your national culture. In most of my companies this has happened naturally, as I’ve had international cofounders. So it was surprise for me trying to opposite, entering into a company hadn’t done this. Here it became an gigantic task to change the culture from a Danish company to one where we spoke English and German, and made space for new habits and processes.
A varied team of nationals also makes it more likely you’ll have inhouse knowledge about your new markets.
- Expect major differences, even in markets you think you know
When I lived in New Zealand many new land developments were built without using the number 4 in the addresses. This is because the target audience is Chinese immigrants whom associate the number 4 with death, so they don’t buy property with this number on the door. Although the developers were New Zealanders they understood the financial implications of not addressing their customers concerns.
You’ll probably encounter cultural differences in a smaller way, but they will be equally important for the uptake. For example, in one company we found that German customers were more concerned about privacy than our other customers. First we create website communication to confirm in that we never share anyone’s contact info. Then we implemented identity verification by email instead of SMS. These details were deal breakers for new German customers and made it much easier to get people onboard. That probably sounds easy, but the problem isn’t making the changes — it’s identifying which if your one million moving parts isn’t working optimally. That takes man power.
- Don’t expect partners to get you in. No one cares as much about your product as you do, therefore you cannot rely on partnerships to get your product positioned on the market. 99% of the young companies I talkl to have disapointing experiences with using partnerships to penetrate new markets. Parters have their own agendas, KPIs and goals — and your product is going to get minimal mindshare. Rather, choose a journey where you can control the outcome.
- Like starting over. Expect that every time you go into a new country, it’s like starting a brand new company. With new customers, new culture, no connections and no brand name it will be almost as hard as starting in the first place back in your home market. Therefore, ensure you have the right human ressources in places, expect to travel constantly or preferably relocate key personel to the new market. Don’t dont go into several markets at once, or expect things to go smoothly.
- Go big. It’s going to be complicated and expensive, so don’t go before you have sufficient capital to go all the way, this is not something you do by halves. Perhaps the most crucial factor of a successful market penetration is native staff. I’ve tried several times to go into a market without natives in culture and language. It’s never worked. The last time I went into a new country we decided to deal with this upfront. We hired a full team of native Germans from the exact geography we’re selling to. That meant 6 people living in hotel rooms for 8 months before we were ready to move them to the new country. Expensive but sometimes you’ve got to do what you’ve got to do. And worked for us. Previously, in another company, I’ve found this wasn’t even enough — there we also needed people with established local network. So, don’t go before you have the ressources.
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Tine Thygesen is am a serial entrepreneur, having started and led 5 internet companies. Right now she helps other people’s companies as a speaker, professional board member and CEO advisor to those that want to grow faster and those that need digital transformation.
Image credits to Brand Quarterly